United States: Top Ten Things Every Government Contractor Should Know About Bid Protests

As government contracting continues to become more competitive
in response to shrinking budgets for federal contracts, more
disappointed offerors are pursuing bid protests to protect their
interests. After climbing rapidly through the mid-2000s, federal
government spending on contracts reached a high of almost $541
billion in Fiscal Year ("FY") 2008. Since then, spending
has dropped to $517.1 billion in FY 2012 and continued to decline
in FY 2013. As contractors fight to maintain their piece of the
federal procurement budget, it is increasingly important for these
contractors to understand their options for challenging agency
procurement decisions through bid protests.

1. Interested Party/Standing

To file a bid protest, a protestor must demonstrate that it has
standing as an interested party, meaning the protestor must be an
actual or prospective offeror whose direct economic interest would
be affected by the award of a contract or by the failure to award a
contract. Thus, while a protester challenging the terms of a
solicitation must be an actual or prospective offeror, a protestor
challenging an agency's selection decision must also
demonstrate that it would be next in line for an award but for the
agency error or that it would regain the opportunity to compete if
its protest was sustained.

2. Forum Selection

A contractor challenging a federal procurement may generally
choose to file a bid protest before the agency administering the
procurement, the Government Accountability Office (GAO), or the
U.S. Court of Federal Claims (COFC). Agency-level protests
typically offer the least expensive and quickest option for a
disappointed offeror, followed by GAO protests, and then COFC
protests. For agency-level protests, the Federal Acquisition
Regulation (FAR) requires agencies to use best efforts to resolve a
protest within 35 days after the protest is filed, although some
agencies have implemented their own rules requiring shorter
timeframes for resolution. The FAR similarly imposes a strict
deadline for resolving protests filed before GAO; however, GAO has
up to 100 days after the initial protest filing to issue a
decision. By contrast, there are no time constraints on COFC's
authority to resolve bid protests.

Further, because none of these forums hold appellate
jurisdiction over the others, a protestor who is unsatisfied with
the result of a protest may re-file the protest in a different
forum, with limited exceptions. For example, a protestor
disappointed with the outcome of a GAO protest may be able to file
a COFC protest, but a protestor that starts at the COFC cannot
later file a GAO protest based on the same issue. Thus, contractors
may want to start with an agency-level or GAO protest before going
to the COFC.

Although agency-level protests may be relatively quick and
inexpensive, they also have significant disadvantages compared to
GAO and COFC protests. For example, agency-level protestors have no
right to discovery. By contrast, GAO and COFC protests require
limited discovery, which means agencies must produce an agency
report or administrative record containing all documents relevant
to the protest. Further, in some cases, a COFC protest may allow
for additional discovery (e.g., depositions).

Another important distinction between agencies, GAO, and the
COFC is the difference in remedies available to a disappointed
bidder. While agencies and GAO have limited authority and only can
issue recommendations, the COFChas the power to enforce its
judgments. Although this distinction has the potential to
significantly impact forum selection, as a practical matter
agencies generally follow GAO's recommendations.

3. CICA Automatic Stay

One significant advantage only offered by GAO protests is the
availability of an automatic stay of contract award or performance
under the Competition in Contracting Act ("CICA"). To
obtain a CICA stay, the protestor only needs to file its protest
within 10 days of the contract award or within five days of its
debriefing. However, the requirement for a CICA stay is not
triggered until GAO provides notice of the protest filing to the
contracting agency. Further, because GAO has up to a day to provide
the required notice, contractors should file protests in advance of
the filing deadline when requesting a CICA stay to ensure that GAO
has sufficient time to notify the contracting agency.

By contrast, CICA stays are not available in COFC protests.
Nonetheless, the COFC may stay contract award or performance
through granting injunctive relief, although grants of injunctive
relief require the protestor to satisfy a relatively high standard.
Further, protestors must not only satisfy a high burden to warrant
injunctive relief, but also must post security in an amount deemed
appropriate by the court to pay the costs and damages sustained by
a party found to have been wrongfully enjoined or restrained.

4. Agency Debriefings

Even though competitive procurements require the agency to
conduct a debriefing with an offeror following the award decision,
the manner and content of debriefings vary greatly. In some
procurements, the agency may provide a written debriefing, while in
others the agency may provide an in-person or telephonic
debriefing. Moreover, some debriefings include detailed analysis,
redacted versions of source selection documents, and even an
opportunity for the protestor to have the agency respond to
specific questions. Other debriefings, are limited to the
information required under the FAR—e.g., evaluation of
significant weaknesses or deficiencies in the offeror's
proposal, overall evaluated cost or price and technical rating, or
overall ranking of the offerors. Unfortunately, despite the lack of
uniformity and the limited regulations governing the scope of
debriefings, an offeror cannot protest the content of its
debriefing.

5. Pre-Award vs. Post-Award Protests

Regardless of which forum a protestor chooses, protests
challenging the terms of a solicitation must be filed prior to the
closing date for proposal submissions. After that deadline passes,
a protestor only can challenge the terms of a solicitation if those
terms contain a latent ambiguity, meaning that the solicitation
error was subtle and not capable of being identified until the
evaluation. The latent ambiguity exception, however, often can
prove a difficult standard to meet. Thus, before the proposal
submission deadline, contractors should carefully review
solicitations for any unclear or potentially discriminatory terms
and consider addressing those terms with the agency and, if
necessary, filing a protest. By contrast, post-award protests may
challenge a much broader range of issues and follow different
timeliness rules.

6. Timeliness Rules

Except when based on alleged improprieties in a solicitation,
agency-level protests and GAO protests must be filed no later than
10 days after the basis of protest is known or should have been
known, whichever is earlier. Agencies however, may consider the
merits of a protest filed outside the 10 day requirement for good
cause or when the agency determines that a protest raises issues
significant to the agency's acquisition system. Further, where
the protest challenges a competitive procurement under which a
required debriefing is requested, the protestor has until 10 days
after the debriefing to file a protest. However, the protest must
be filed within five days of the debriefing to secure a suspension
of contract performance. Unlike agency-level and GAO protests, the
COFC does not require protestors to satisfy strict filing deadlines
in most cases, although the COFC has effectively adopted GAO's
timeliness rule for protests challenging solicitation
improprieties.

7. Hearings

Although hearings are regularly held in protests before the
COFC, GAO holds hearings in a limited number of protests.
Generally, GAO will hold a hearing only to resolve a factual
dispute that requires assessing witness credibility or whereGAO
determines that a hearing would be more efficient than proceeding
on written submissions only. As evidence of how rarely GAO conducts
hearings, between FY 2008 and 2012, GAO conducted hearings for only
260 of 10,768 protests filed.

8.. Filing Trends

Although the number of GAO protests continues to rise, the rate
of increase has tapered off in recent years. In FY 2012, GAO saw
2,475 protests filed, compared to 2,353 in FY 2011, 2,229 in FY
2010, 1,989 in FY 2009, and 1,652 in FY 2008. By contrast, the COFC
hears a relatively stable number of protests each year. Between FY
2005 and FY 2010, only 454 protests were filed before the COFC.

9. Success Rates

Despite the noted increase in GAO protest filings, the sustain
rate has remained relatively stable. In FY 2012, GAO sustained
18.6% of protests, compared to 16% in FY 2011, 19% in FY 2010, 18%
in FY 2009, and 21% in FY 2008. Although these figures may seem
low, GAO tracks this data only on protests where GAO issues a
formal recommendation. As such, GAO's statistics fail to
account for protests in which a protestor successfully obtains
corrective action from an agency.

10. Potential Changes to GAO's Handling of
Protest

Despite the drastic increase in protest filings, GAO continues
to maintain a manual docketing system. However, GAO's FY 2014
budget request asked Congress to provide GAO the authority to
collect a filing fee for protests so that it could fund
development, implementation, and maintenance of an electronic
docketing system. In response to GAO's request, the U.S. House
of Representatives and Senate appropriations bills have included
language that would authorize GAO to collect the fee, although
neither bill specifies the amount of the fee.

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